When looking at basic pay through an occupation, this can be broken down into selective job roles and what is more likely to be accepted.
For example, a professional role is the highest accepted applicant of occupation when it comes to mortgages. A professional is considered a solicitor, teacher, accountant, vet etc. These roles are considered professional as they are a fixed contract, fully qualified, a governing body registered and with the likeliness of a pay increase somewhere down the line.
The way in which these professions are paid is usually quite straightforward and easy to calculate. A mortgage will typically be calculated on the basis of four times their annual salary.
The reason that professionals are more likely to be accepted is that they are considered a low risk to lenders. They have a regular stable income and are likely to make repayments. On the other foot, are key worker jobs such as nurses, paramedics, firefighters etc, who you would think are under the same bracket, but unfortunately are not.
This is all due to shift patterns, shift allowances, unsociable hours and overtime. Due to some lenders’ limitations, they cannot factor in these particular forms of income with ease.
Because of the variance in monthly income, these job roles aren’t considered stable regular income. In these scenarios, the income is more than likely to be calculated on the lower-paid months, or a calculated average to avoid any payments unable to be made. This isn’t necessarily a bad thing, as it factors in affordability, it however means you may be limited in what you can borrow.
This doesn’t need to be a stressful process if you are advised in the right way. When it comes to applying for a mortgage when you’re self-employed, you just need to ensure you are organised and that all your figures reflect a true representation of your earnings.
You want your income records and accountant documentation to show that your income has been both regular and stable for the last 2 to 3 years. However, the risk with self-employed life is that it’s not always that plain sailing. This is why it’s important to seek advice from a mortgage advisor who can direct you to a lender who can tailor a mortgage to your self-employed needs.
In addition to occupation and income, there are also a few forms of income that are generally off-limits when it comes to providing evidence on a mortgage application. Be mindful of what you can and can’t use before you consider applying.
Having a lower income certainly doesn’t exclude you from being eligible for a mortgage, it just means you won’t be able to borrow as much. This is only for your own benefit as it’ll mean you can afford the repayments on your lower income.
There aren’t specific mortgages for lower incomes as such, but there are always ways to increase your likelihood of being accepted such as a good credit rating, paying off student loans etc. It’s still an insightful idea to ask a financial adviser for your options if you believe your income to be low for a mortgage.
Your credit score is calculated using a point-scoring system. This system is based on the number of credit cards you have open, your repayments, missed repayments, if you are registered to vote and a few other vital factors. There are a few credit referencing agencies that use this scoring system, so no one answer is correct.
